Games are a serious business. The numbers don’t lie. Games generated $91 Billion in 2016 – according to Superdata Research. Mobile was at the forefront – totaling $41 Billion (up 18 percent). Meanwhile, esports generated $892 Million.
To better understand the overlap of these two segments, eSports iQ sat down with Skillz CEO – Andrew Paradise. Skillz provides an esports tournament platform that can be integrated into mobile games. The company has run 100+ million mobile eSports tournaments, awarding over $5 million in cash prizes to players monthly. Below is the Q&A:
What role(s) will mobile play in the arc of eSports’ growth in 2017 and beyond?
Mobile has already been playing a vital role in the growth of eSports. In 2016 alone, the Skillz mobile eSports platform accounted for 30 percent of all eSports prizes awarded. According to Twitch, in 2015 mobile accounted for 35 percent of the company’s monthly viewership.
The success of mobile eSports titles like “Hearthstone: Heroes of Warcraft” has inspired game studios to develop more elaborate and competitive mobile games. Based on the trends we’re seeing surrounding both players and viewers, mobile eSports will continue to comprise an even larger part of the industry in 2017 and beyond.
Skillz recently rolled out support for brand sponsored tournaments. What’s the ROI for brand activations with games that haven’t reached critical mass?
Brand-sponsored tournaments offer advertisers the ability to access a uniquely diverse gaming audience. The Skillz user base is 49 percent female, as opposed to just 19 percent for the industry as a whole. Sponsorship opportunities also offer the ability to host physical and streamed events, working with influential personalities on Twitch or YouTube to maximize ROI and user engagement.
What are the major hurdles for subscription based monetization models in mobile games?
The monetization of mobile games has shifted over the years from a flat fee to in-app purchases to subscriptions. A difficulty with the subscription model is that it gives players the expectation that they’ll receive a regular cadence of new content and gameplay. This expectation then puts pressure on developers, who may not have the bandwidth needed to frequently provide fresh content.
In short, the wrong form of monetization can hurt the user experience and negatively impact engagement. By contrast, through implementing mobile eSports as a source of revenue, developers can attract new users and better engage existing players while conserving the resources needed to quickly and continuously develop new content. The Skillz platform in particular helps developers generate eight times the average revenue per daily active user (ARPDAU) and nearly double the time users spend in game.
Was Pokémon Go an aberration or are AR-driven mobile games the future?
Pokémon Go helped validate the power of augmented reality, but it’s a trend that was already developing in the industry prior to the game’s release in July 2016. According to a GDC survey in January 2016, 75 percent of respondents believed that VR/AR are long-term, sustainable businesses.
Big brands are starting to jump on the trend, including Google, whose Tango project is trying to revolutionize AR. In 2017, we expect to see hit games in both AR and VR. Mobile will provide accessibility for consumers, and multiplayer competitions will enable social network effects for a truly immersive experience.
Can you detail the two patents Skillz was recently granted?
The United States Patent and Trademark Office recently granted Skillz two new patents: U.S. Patent 8,882,576 and U.S. Patent 9,349,246. Skillz has exclusive rights to both patented technologies. These patents represent two technologies critical to our company’s goal of bringing eSports to the masses.
The first (U.S. Patent 8,882,576) covers the mathematical algorithm that enables Skillz to evaluate how much of the outcome of a given game depends on skill vs. chance. This is a key component of qualifying a game as a sport and ensures fair competition, which is a fundamental building block in the intellectual property of Skillz.
The second (U.S. Patent 9,349,246) is for our integrations portal, which gives mobile game developers a free, self-service way to implement eSports tournaments into their games. We built the integrations portal to give developers total control over their games and tournaments. By creating this portal, Skillz gives developers access to technology that would cost a prohibitive amount of money and time to develop on their own.
With the announcement of these two patents, we’re doubling down on our vision of empowering any mobile developer to turn their game into a competitive eSport.